By Joe Morey
Blue Stone Strategy Group has been assessing several areas of tribal operations since June, which include retail operations, the Accounting Department, the Health Center, taxation and government structure. On Tuesday, Dec. 3, Blue Stone plans to give the LCO Tribal Governing Board (TGB) an update on these assessments.
The LCO Tribe submitted an application last month for the I.H.S. Joint Venture Funding program, which, if approved would pay for operations and payroll for a new tribal health center for the next 20 years. I.H.S. will notify the Tribe on Dec. 2 if they were selected to move forward in the application process with a handful of other tribes. The next phase in the application process has to be submitted by Dec. 23.
The next phase is more detailed and the Tribe will have to define what it is LCO wants to do with their new facility. The TGB asked Blue Stone to do an assessment of the current health facility and make sure a new clinic is feasible for the Tribe.
LCO TGB member Tweed Shuman said site selection is currently being discussed by the TGB.
“It’s important the new location can serve the non-Tribal community with services such as a pharmacy and urgent care,” Shuman noted. Three sites recently proposed include the vacant corner across from the Sevenwinds Casino and Dollar General, next to the Bizhiki Wellness Center and in the field across from the LCO Police Department.
An additional site location was added to the discussion at the corner on Froemel Road near the Four Corners. Shuman noted this area wouldn’t be an ideal spot for serving the non-Tribal community.
In a recent meeting between TGB, officials from I.H.S., the architecture firm DSW, and Blue Stone’s Michelle Hirst, who is doing the assessment, Hirst stated she is still waiting on three years of financial history to put with the application process. As part of the health assessment and the application process, which will be required in the next phase, Hirst said she needs the actuals for 2017, 2018 and 2019, but hasn’t received them from Accounting.
Health Center Assessment
Shuman said Blue Stone is currently interviewing the staff and all directors trying to determine the stability of the health center for the Joint Venture funding.
“The stability assessment being conducted by Blue Stone is looking at the health center’s financial stability, their customer service and staffing,” Shuman explained. “Are we stable in our present location? Will this allow us to move into a bigger, more modern facility? Are we capable enough to move into a bigger facility? These are questions our funding sources (Shakopee and I.H.S.) will consider before they grant us this joint venture.”
Shuman also went on to explain how he is concerned with tribal members receiving bills for their health care.
“Recently health care has become very profitable. A lot of tribes are using their health centers for a revenue stream to pay for more services for their tribal members. This includes surgeries and other procedures that were never covered under I.H.S. funding,” Shuman said. “It concerns me we have tribal members getting bills despite all the 3rd party billing we are getting. That funding should go to those bills rather than for staff salaries and administrative costs. A portion of a staff salary is paid by I.H.S. funds and the rest is paid by 3rd party billing or FQHC funds.”
As part of Blue Stone’s assistance with the tribe’s Accounting Department, Sean McCabe has been retained to oversee operations. McCabe said they are just wrapping up the 2018 audits and they plan to have 2019 done by the end of June. He told the TGB at a meeting on Nov. 12 that at that time, everything will be all caught up and back to normal.
“I have a better understanding about revenue coming into the tribe,” McCabe said. “I think we’re making a lot of progress and we’re ready to move forward.”
McCabe said his next priority was getting the tribal budget prepared.
The restructuring of the two Convenience Store operations at the corner of Hwy B and K continues but the grand opening that was planned still remains postponed until the management and inventory control positions are filled.
Several job postings have been posted regarding the C-Stores. The TGB is actively seeking out two managers, one for each C-Store at the corner of Hwy B and K, and a retail inventory manager who will oversee inventory for all three tribal convenience stores and the LCO Country Store.
Shuman said these positions need to be filled immediately and the TGB is very determined to give these positions to tribal members. He added once these two manager positions are filled, an active and aggressive search will take place for an overall retail director to oversee all the tribe's retail outlet managers and operations.
Blue Stone also conducted a “mini” feasibility study for the fast food space within the LCO C1 Store.
“The current chicken fast food concept is outdated and in need of remodeling,” Blue Stone wrote in a report to the TGB. “The location is an incredible opportunity and with so many store visits each day this space has the potential to more than double its current sales volume with the implementation of a new concept.”
Shuman said the TGB wants the location to remain as a chicken or burger place but it must be determined what would work best.
Currently, Blue Stone is reaching out to several franchise opportunities for the location. In a recent report to the TGB, they shared several restaurant ideas that may be a good fit.
Culver’s with the nearest location 59 miles away and average sales per unit of $2.3 million;
McDonald’s with a location in Hayward and average sales per unit of $2.67 million;
Sonic Drive-In with the nearest location 287 miles and average sales per unit of $1.25 million;
A&W with a location in Minong and average sales per unit of $951,000;
Wendy’s with average sales per unit of $1.6 million.
Other restaurant franchises Blue Stone listed as a good fit for the C1 location include Chick-Fil-A, Popeye’s Chicken, Carl’s Jr, Dairy Queen and Jimmy John’s. They also listed several pizza chains as a good fit which include Papa John’s, Domino’s and Little Caesar’s.
The grand re-opening, once it happens, will see a newly-structured C2 Travel Plaza and C1 Convenience Store. Part of the re-structure includes expanding C2 into a full tobacco shop and liquor store with expanded beer, wine and liquor sales. Most of the alcohol and tobacco sales and stock from C1 will be moved into C2. This move will free up space and visibility within the C1 store but will continue the overstock of alcohol and tobacco since there is such a high volume of sales. There will also be no back stocked beer on the C1 floor with all product stored in the walk-in coolers.
TGB member Tweed Shuman said this will reduce clutter in the C1 store and allow employees behind the counter to clearly see the entire store. Currently, the cigarette storage area limits what the clerks can see happening in the store.